Boyd Gaming reports year-over-year increase in 4Q revenue

By J.D. Morris

Tuesday, Feb. 16, 2016 | 4:43 p.m.

Boyd Gaming, the casino company whose Las Vegas area properties include the Orleans, the California and Sam’s Town, reported its fourth quarter and full-year earnings today.

Company: Boyd Gaming Corp. (NYSE: BYD)

Revenue: $542.7 million for the fourth quarter, up 2.1 percent from the fourth quarter one year earlier. For the full year, the company reported pro forma net revenue of $2.2 billion, up 2.7 percent from 2014’s pro forma results.

Loss: $6.87 million for the fourth quarter, compared with a loss of $32.4 million one year earlier. The company said in a statement that fourth quarter 2014 results included $40.6 million in noncash impairment charges, while fourth quarter 2015 results included $17.5 million in noncash intangible asset impairment charges and a pretax loss on early extinguishments of debt of $8.4 million.

For the full year, Boyd reported $47.2 million in net income, compared with a $53 million loss in 2014. Similar to the fourth quarter, Boyd said its 2014 results included $60.8 million in impairment charges while 2015 results included $18.6 million in noncash impairment charges and $40.7 million in pretax losses on the early extinguishments of debt. Also, the company said settlements of some income tax appeals from previous years reduced its 2015 income tax provision by $30.4 million.

Loss per share: 6 cents in the fourth quarter, compared with a loss of 29 cents per share during the same period the year before. For the full year, Boyd reported earnings of 42 cents per share, compared with a loss of 48 cents per share in 2014.

What it means: Among its Las Vegas locals-oriented casinos, Boyd reported net revenue of $158.8 million in the fourth quarter, up 4.6 percent from one year earlier. The company said its adjusted earnings before interest, taxes, depreciation and amortization in that business segment was $44 million — the best fourth quarter in eight years for Boyd’s locals casinos. That strength stemmed from “broad-based growth” in gaming as well as nongaming revenue, the company said.

Meanwhile, at Boyd’s downtown Las Vegas casinos, net revenue rose 4.8 percent year over year to $62.5 million. Adjusted earnings before interest and other costs grew for the sixth straight quarter, increasing 23.4 percent to $16.2 million. Boyd said it benefitted from “significant increases in visitation throughout the Downtown area,” as well as lower costs for fuel in its Hawaiian charter service.

Boyd CEO Keith Smith said on a conference call with analysts that Las Vegas remains “an encouraging market” for his company. He said the Southern Nevada economy boasts a “steadily improving labor and income picture,” seeing growth in employment and average weekly wages as well as record visitation levels and other positive signs.

Boyd is also a joint owner of the Borgata casino in Atlantic City.

There, the company reported fourth quarter net revenue of $193 million, up 7.7 percent from the same period in 2014. Adjusted earnings also grew 27.3 percent in the fourth quarter as Borgata saw “successful efforts to leverage (its) market-leading amenities,” Boyd said in the statement, as well as higher table hold and improved efficiency in its marketing initiatives. Additionally, the fourth quarter brought records in gross slot win, hotel room occupancy and gross gaming market share to the Borgata, according to the company statement.

The company is in the midst of a major initiative aimed at strengthening its nongaming offerings. Smith said Boyd expects it to be a more than $100 million investment, including $34 million spent last year and $45 million in anticipated spending this year. The company has already revamped about 3,000 of its hotel rooms and introduced several new food and beverage concepts such as the California Noodle House, the Filament and Briggs Oyster Co. in Las Vegas.

All things considered, Smith said 2015 was a good year and projected confidence for Boyd’s outlook moving forward.

“We see no reason that the current consumer environment is going to change,” Smith said on the conference call. “Nationwide, our customers are healthier and more confident, and we expect the revenue growth that began in 2015 will continue.”

Boyd said it had $3.32 billion in total debt at the end of the year.